FLASH REPORT!

Gov. Brown’s Revised Budget Calls For Longer, But Fewer Workdays

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Gov. Jerry Brown’s revised budget proposal wants to revamp the way the state does business by keeping offices and agencies open longer to serve the public outside of normal business hours, but would save 5% on salaries by cutting workers overall hours. This change is expected to save the state nearly $840 million, including $400 million for the general fund, if it’s implemented.

The proposal is also expected to save on the cost of operating state buildings as some agencies are expected to move to a four-day workweek. “What the public may see in some cases will be extended work hours. So greater services outside of the traditional 8 to 5, but we may be closed on Fridays,” says finance director Ana Matosantos. “So we may be open 7 to 7 four days a week instead of 8 to 5 five days a week.”

The additional cuts being proposed are in response to the state’s higher than expected costs and lower than expected revenues. The budget deficit is now estimated at $15.7 billion, compared to the $9.2 billion in Brown’s original budget proposal. Overall, the revised budget proposes an additional $4.1 billion in spending cuts for a total of $8.3 billion.

Matosantos says no exemptions are contemplated for the 5% reduction for state workers, but past cutbacks and furloughs have not always been applied evenly across the board. Additionally, any changes would have to be approved by the legislature and/or gained through negotiations with the labor unions, according to the administration.

The State Compensation Insurance Fund declined to comment on the proposal, saying it’s premature to say what if any impact it will have on its workforce. “There’s nothing specifically laid out to respond to,” says spokeswoman Jennifer Vargen.

Gov. Arnold Schwarzenegger initially applied his furlough plan to workers at the State Fund, but the courts later exempted the workers at the quasi-governmental agency from the cutbacks. The courts found that the carrier’s staffing decisions are to be made by State Fund’s board of directors and cannot be altered by an executive order from the Governor. State Fund employees’ salaries are paid through employer premiums and do not come out of the state budget.

Salaries for workers at the Division of Workers’ Compensation, Cal/OSHA and the Workers’ Compensation Appeals Board are similarly funded by user assessments on employers. Past cutbacks, however, have been applied at these agencies. Department of Industrial Relations officials said they had been given no advance notice of the governor’s proposal and would be working through the information from the Department of Finance. Beyond the potential staffing initiative, however, there did not appear to be any other changes directly impacting DIR.

Similarly, officials at the California Department of Insurance noted that it’s still early in the process and they plan to monitor the negotiations closely. “Since it’s a statewide proposal we are presuming it could impact us,” says deputy press secretary Pat McConahay. “We’ll just have to watch to see what the labor organization will do at the [negotiating] table.”

Brown indicated that he intends to achieve the cuts through negotiations with the unions representing state workers. Stay tuned.

The Oklahoma House of Representatives late Wednesday voted down an a bill passed by the Senate that would have allowed employers to offer alternative benefit plans and opt out of the state workers’ compensation system. Log on to WorkCompCentral to read a breaking news alert.

Frustrations with medical provider networks, QMEs, liens and some interesting attorney activity taking root in Fresno greeted administrative director of the Division of Workers’ Compensation Rosa Moran at Fresno’s City Hall. It was the fourth workers’ comp listening tour the administration has held this month. Roughly 130 people signed up to hear what defense attorneys, applicant attorneys, employers and medical providers say needs to be done to fix the system.

A growing frustration with lien claimants, the QME process, litigation and timely medical treatment dominated most of the proceedings. In particular, the growing number of lien claimants is seen by some defense attorneys as “the demise” of the workers’ comp system.

Dan O’Brien, a defense attorney, told the forum that the problem can be summed up in litigation costs involving lien claimants, “medical mills,” and deals made with applicant attorneys. He says that a cottage industry has sprung up between medical doctors, chiropractors and psychiatrists who refer patients back and forth to each other and subpoena records before even filing an application.

“The whole system is set up, so that if they have a lien claim, they will make as many appearances as possible and try to settle if they have $10,000 for $2,000,”O’Brien said, adding that, “If we could just follow the rules that we now have…” regarding proper and timely settlement, it would go a long way toward fixing the system. “It takes the Board’s time, and it’s just unfair,” he said.

Moran asked him if he knew why the Fresno Workers’ Compensation Appeals Board, despite not being part of Southern California, is showing an uptick in liens.

O’Brien said Los Angeles-based attorneys are getting together with doctors in the area to sign up patients, who in some cases don’t even know they have injuries. “I would say it’s five or six groups in town that are taking up 70% of my clients’ and 70% of the Board’s time.”

Defense attorney Richard Krum seconded the concern about what he called the “proliferation of lien claimants” for self-procured medical treatment. He says that the problem occurs when injured workers through their attorneys select doctors outside the network. The focus seems to be getting around the MPN requirements and treating injured workers in these so-called “medical mills,” as a way to make money.

“It’s very disturbing when you go to court and no longer is the focus on the injured worker. The injured workers… are now being pushed to the background and it’s all about litigation for the lien claimants,” Krum said.

Some speakers touched on MPNs-the good and the bad. Darlene Tiller, a registered nurse, said that employers that carefully select their doctors to create their own network, also known as boutique MPNs, have far more success in treating injured workers. She told AD Moran that boutique is the way to go.

“There’s no need for utilization review and there is no need for bill review because all the physicians on that particular network bill to the [fee] schedule,” Tiller said, adding that it’s distressing that so many insurance carriers feel the need to put every single treatment request through UR. “Why would you put something that cost less than $100 through utilization review when it’s going to cost you $100 to put it through there?”

Applicant attorney David Rockwell said that massive MPNs cause nothing but treatment delays because of the difficulty in actually finding a treating doctor in the network.

“It’s inadequate and often a sham…We get these lists of MPN doctors and we call and they’re not taking workers’ compensation cases. They don’t even know they’re on the list, and we can’t find proper care givers,” Rockwell said.

Panel QMEs spoke about the difficulties they have getting paid, sometimes for nothing more than minor administrative reasons. Or, they are simply ignored by the carriers. If they call to complain they run the risk of engaging in ex parte communication, so they end up having to submit liens. Attorneys chimed in other the months long delays their clients endure waiting for panels. They add that further delays can occur if a panel request form isn’t filled out correctly. After finally being told about the error, they’re then told they have to start over.

“If we go the panel route it’s taking six months in represented cases to get that list…By then the treatment that has been needed…the injured worker’s been waiting six months,” one attorney said.

Moran was happy to inform him that his information was a little “dated.”

“If there is anything we’ve been pushing on it’s the panel process. If we have panels that take six months to issue, we’re not serving anybody. When I last checked, it was a little bit over thirty days. They get 5,000 panels a month, so this is pretty amazing. It’s something we’re spending a lot of resources on,” Moran said.

As for submitting proper QME requests, Moran warned the attorneys in the room that leaving the filling out of that form to someone else is probably not in their best interests. Because of the Division’s limited resources, the forms that are filled out correctly are going to be dealt with first. “Non-compliant” requests get put to the side.

“I try to say this at every forum. If there is anything that you don’t want to delegate as an applicant attorney or a defense attorney, it’s that little panel request form,” Moran said. “I know that seems like a clerical procedure, but if you do it incorrectly you cost yourself a lot of months.”

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By Marc Lifsher, Los Angeles Times

April 12, 2012

SACRAMENTO — The two biggest players in California’s workers’ compensation system — labor unions and large employers — are quietly crafting the biggest overhaul of the mandatory insurance program in a decade.

The goal: provide more care to injured workers without raising premiums for businesses.

The negotiations are focused on squeezing waste from California’s $15-billion system, which, while huge, often delays or denies compensation and medical care that could get injured workers back on the job.

Average compensation paid to California workers in cases of permanent partial disability was $12,000 last year. That’s down more than half from $25,000 in 2004, according to the UC Berkeley Survey and Research Center.

The lower payouts are a result of laws approved by the Legislature in 2003 and 2004 aimed at reining in skyrocketing employer premiums. The changes provided relief to employers, who saw their premiums decline by about 60%. Insurers benefited with higher profits because they paid fewer and smaller claims.

But the changes have been tough on California’s injured workers, experts said. Workers can spend years wresting settlements from workers’ compensation courts while remaining too crippled to return to their old jobs.

“The disputes go on indefinitely. There are too many conflicting opinions,” said Sean McNally, a vice president of Grimmway Farms of Kern County, the country’s largest organic vegetable grower. His company, best known for its baby carrots, led the fight for workers’ comp reform last time around.

Now, consensus is forming that it’s time for the workers’ comp pendulum to swing back toward the victims that the system originally was set up to assist. The administration of Gov. Jerry Brown is hoping to broaden support for the changes by holding public forums up and down the state this month.

“It seems perfectly clear to the participants in this system that the permanently disabled worker is not being adequately compensated,” said Martin Morgenstern, a top advisor to Brown and secretary of the California Labor and Workforce Development Agency. “We have a serious problem, and it needs to be fixed, and fixing it isn’t going to be cheap.”

But the Brown administration concedes that it could be counterproductive to raise the cost to employers at a time when California is battling double-digit unemployment.

“We cannot raise premium costs to employers at this time,” Morgenstern testified at a recent legislative informational hearing. Money to boost disability benefits can be found within the workers’ comp system, he said.

An analysis of potential savings prepared in 2009 by workers’ comp experts in the administration of then-Gov. Arnold Schwarzenegger identified $793 million to $1.5 billion a year in potential savings.

The biggest savings could come by simplifying the criteria for calculating permanent disability compensation for injured workers, the 2009 report said. Other economies would come by tying fees for outpatient surgeries to the lower-cost state and federal Medi-Cal system and by cutting into a backlog of more than half a million outstanding medical bills that have been piling up in the Los Angeles workers’ compensation courts.

An updated version of the confidential analysis is being used as a template in the early stages of the workers’ comp overhaul negotiations.

Getting an agreement to strip “inefficiencies and frictions” from the system depends on everyone in the workers’ comp system “taking a haircut” by giving up some of their legal rights and privileges, said Angie Wei, the chief lobbyist for the California Labor Federation and the chairwoman of a state government research bureau, the Commission on Health, Safety and Workers’ Compensation. That includes injured workers, employers, doctors, hospitals and insurance companies, she said.

“There are too many lawyers in the system,” said McNally of Grimmway Farms. “We need to come up with one that’s more administrative, more predictable, more affordable, puts more money in the hands of injured workers and brings down the cost to employers.”

McNally’s call for streamlining comes as costs to insurers are starting to creep up again after plummeting from historical highs. Average insurance rates fell to $2.16 per $100 of payroll in 2008 from $6.29 in 2003, according to an industry statistical service, the Workers’ Compensation Insurance Rating Bureau. Since then, they’ve climbed to $2.37 per $100 of payroll.

At the same time, insurance companies report that they are spending more on claims, claims processing and general expenses than they are receiving in premiums paid by employers. In 2010, they spent $1.16 for every premium dollar, compared with 73 cents in payouts for each $1 in premiums in 2005.

“Medical costs specifically are on the rise,” said Mark Sektnan, president of the Assn. of California Insurance Companies, a trade group. Any move to boost benefits for injured workers, he warned, needs to be offset “with reforms that will control costs and maintain predictability.”

Insurers, during upcoming negotiations, will press to tighten fee schedules on doctors and other medical providers and to speed up medical treatment so that workers get the care they need without undue suffering, said Mark Webb, the vice president of Pacific Compensation Insurance Co. in Agoura Hills.

“If we have adequate benefits from the get-go, the idea will be that there will be less pressure on the injured worker to maximize their award,” he said.

Finding enough waste to improve the lives of injured workers shouldn’t be overly tough, said Jesse Ceniceros, president of Voters Injured at Work, an advocacy group. Ceniceros, a former Lockheed Marietta hydraulic mechanic, settled a claim in 2010 for injuries he suffered in 1999 to his hips and knees. He received half as much money as he would have gotten under the pre-2004 permanent disability requirement.

“Workers’ compensation is a $14.8-billion system. It’s a lot of money,” he said. “The injured worker isn’t benefiting from that.”

After the hearing, the California Channel website (www.calchannel.com) will offer the webcasts of Legislative proceedings.

By Greg Jones, Western Bureau Chief
Insurer expense data released by the Workers’ Compensation Insurance Rating Bureau this week show that spending on

vocational rehabilitation has dwindled to one-twelfth of the amount that was spent before 2004 reforms.

Advocates who have been pushing for five years to pass legislation to boost supplemental job displacement benefits say the Rating Bureau’s figures prove disabled workers aren’t getting the retraining they need to find other jobs.

Statistical reports provided to the WCIRB’s Actuarial Committee during a meeting in San Francisco Tuesday show that in 2004, insurers spent $586.3 million for vocational rehabilitation, accounting for 12.3% of total paid indemnity.

In 2010, California insurers spent $32 million for vocational rehabilitation, accounting for 1.1% of total paid indemnity, according to the Rating Bureau’s First Quarter 2012 Review of Diagnostics.

The maintenance allowance, later eliminated by state lawmakers, accounted for $257 million of the 2004 spending, while $127 million was spent on vocational rehabilitation evaluations and $191 million was spent on education and training. In 2011, $27 million of the $32 million spent went to education vouchers.

Assembly Bill 227 and Senate Bill 228 eliminated vocational rehabilitation starting Jan. 1, 2004, and replaced the benefit with the supplemental job displacement benefit. The statute requires payment of vouchers that qualified injured workers can use for tuition, fees, books and other educational expenses. An injured worker with a permanent disability award who is not re-hired is eligible for a voucher of between $4,000 and $10,000, depending on the disability rating.

Mark Gerlach, a consultant to the California Applicants’ Attorneys Association, said because there was a broader array of benefits, such as the continuation of temporary disability during retraining, under the old system, the change to the voucher system in 2004 should have resulted in a significant drop in spending. However, Gerlach said he would expect to see similar spending on vouchers in 2010 as was spent on education and training in 2004.

Gerlach said he expected to see a major drop in the percentage of indemnity benefits spent on retraining after the reforms, but he did not anticipate it would go from 12% to 1%.

“What this shows, however, is that the design and implementation of the supplemental job displacement benefit has been so mismanaged and mis-designed that it simply is not a viable benefit for more injured workers,” he said. “At the same time, it’s causing problems for employers because there is a liability out there that they can’t close off.”

Because the voucher is not available until an injured worker receives a permanent disability award, employers can be liable for paying it years from the date of the actual injury.

The fact that the voucher is not available until there is a permanent disability award can also create problems for injured workers. There is a two-year limit on temporary disability benefits and workers need the voucher when those benefits run out, but a worker with a severe injury might not receive an impairment rating for three or more years.

“It’s the most severe injuries and disabilities that need this the most and are affected by the problem in timing,” Gerlach said. “In efforts to try to cut costs, it’s the most severely injured and severely disabled workers who are being asked to pay the price.”

Voters Injured at Work has been pushing legislation for five years to modify the delivery of the voucher system by making the benefit available when the worker is permanent and stationery and the treating physician determines there will be some level of permanent disability. Bills sponsored by Voters Injured at Work would create a flat rate of $6,000 for all vouchers issued. They also would be available to the injured worker before a disability rating is determined.

Three bills aimed at accomplishing that goal have failed. Gov. Arnold Schwarzenegger vetoed AB 1636 in 2007 to make the vouchers available sooner in the claims process. Senate Bill 3 never moved past the Senate Appropriations Committee in 2010.

Last year, Gov. Jerry Brown vetoed AB 211.
This year, Voters Injured at Work is sponsoring AB 1145 by Gil Cedillo, D-Los Angeles.

Jesse Ceniceros, president of the group, said some people are making use of the voucher, but many injured workers are in a position where they need money to pay bills and are willing to settle the benefit for pennies on the dollar.

“It’s not working because it’s so late in the process,” Ceniceros said of the voucher program. “Because of that, people aren’t utilizing the benefit and are being forced to settle for it.”

Training injured workers and getting them back into the workforce is also good for employers because it holds down claim costs, Ceniceros said. The voucher is an important benefit for all stakeholders that is going to waste because it can’t be used, he said.

“The voucher is not the answer to all the problems we’re having, we fully understand that, but it’s a start,” he said.

Ceniceros said he hopes improving the delivery of the vouchers will be included in reform discussions that will kick off with a series of public hearings in April. If vouchers aren’t part of the discussion, Voters Injured at Work is counting on AB 1145, which the California Assembly passed 49 to 24 on Jan. 26.

LA Walmart Employee, Girshriela Green, Tells Her Story Of Poverty And Injury (VIDEO)

Metropolitan State Hospital Employees Rally for More Safety, No Staff Cuts

Concerned Staff Hold Informational Picket on Behalf of Injured Coworkers and Patients; In the Meantime, DMH Seeks Layoffs, Appeals Cal/OSHA Citations

By Greg Jones, Western Bureau ChiefCalifornia Gov. Jerry Brown on Monday appointed applicants’ attorney Marguerite Sweeney of Redding as a commissioner on the Workers’ Compensation Appeals Board.

Despite the appointment, the Appeals Board still has two vacancies. Brown did not reappoint commissioner and former chairman Joseph Miller, who was named to the board by former Gov. Arnold Schwarzenegger in 2005, and whose term expired at the end of 2011.

Sweeney has spent her 33-year law career representing applicants, but has also helped injured workers with Social Security law and civil employment law. Since 1990, she has been the principal attorney at the Law Office of Marguerite Sweeney in Redding.

Sweeney has been involved in legislative efforts to benefit injured workers and successfully argued a case on utilization review before the California Supreme Court, but she said her first-hand experience in the trenches as an applicants’ attorney will be the most important thing she brings to the board.

Ronnie Caplane, who was named chairwoman of the Appeals Board in December, also was an applicants’ attorney when she was in private practice. The remainder of the commissioners, Frank Brass, Deidra Lowe and Alfonso Morsei, came from the defense side of the industry.

Sweeney said it’s important to have different perspectives on the board to arrive at decisions that are fair to all stakeholders.

“My goal on the board will be to look at solutions that are good for everyone,” she said. “My philosophy is that you can come to decisions that are win-win; everything isn’t a win-lose paradigm.”

Sweeney said liens are the biggest problem facing the workers’ compensation system, and something lawmakers and regulators are both trying to tackle. While resolving the lien problem is largely an administrative and legislative task, Sweeney said the Appeals Board can help by providing clear rules and guidance to litigants.

The Appeals Board last August proposed rules that it said would expedite filings, reduce backlogs and free up calendar time for judges.

Rosa Moran, administrative director of the Division of Workers’ Compensation, said in January the WCAB was reviewing comments provided during a public hearing in September, but is almost ready to send the rules to the Office of Administrative Law for final approval. The rules would create a way for the defense to dismiss a lien when a lien claimant does not file a declaration of readiness within one year of becoming party to the case and would allow only one continuance.

Sweeney said she will need to learn more about the lien situation, having practiced in Northern California where they’re not as common or problematic as they are in the southern part of the state.

Sweeney has been actively involved in statewide issues facing injured workers through educational outreach and legislative efforts seeking to end discrimination in apportionment.

Senate Bill 899 strengthened apportionment in California’s system, stating that employers are responsible only for the extent of a worker’s injury that is related to his work. Some providers have interpreted the bill to require apportionment based on genetic makeup, and have reduced disability ratings, for example, because a woman is at a higher risk for osteoporosis or an African-American is at greater risk for hypertension.

The 3rd District Court of Appeals ruled in Vaira v. WCAB that apportionment determinations can’t be based on genetic characteristics, but applicants’ attorneys say that hasn’t kept providers from trying to reduce ratings for applicants who may be predisposed to certain types of conditions.

In 2009, Sweeney headed Injured Women After Reform, an offshoot of the California Applicants’ Attorneys Association focused on ending discrimination in apportionment. Last year, she supported the failed legislative efforts through AB 1155 to amend Section 4663 of the Labor Code to expressly prohibit physicians from basing apportionment determination on characteristics, such as gender, nationality or race.

In 2008, Sweeney successfully argued before the California Supreme Court that the Labor Code requires employers to use utilization review, and not the qualified medical evaluator process, to dispute or delay medical treatment. In the Sandhagen decision, the high court overturned a lower court ruling that Section 4062 allows an employer to seek the opinion of a qualified medical evaluator if treatment is not subject to utilization review under Section 4610.

The Supreme Court said in the decision that a claims adjuster doesn’t have to send every authorization request to utilization review if an employer approves the treatment.

Following the decision, Sweeney said the high court’s ruling would benefit injured workers by making authorization requests more efficient and also reduce costs by eliminating unnecessary UR.

Brad Chalk, president of the California Applicants’ Attorneys Association, said Sweeney will be an asset to the Appeals Board and her decisions will be fair and balanced.

The California Workers’ Compensation Defense Attorneys Association did not respond to requests for comment.

Sweeney said she hasn’t been told when she should report to work as a commissioner on the Workers’ Compensation Appeals Board reconsideration unit in San Francisco.

The appointment requires confirmation by the California Senate and the compensation is $128,109 annually.

Redding woman named to state panel

By Record Searchlight staffRecord Searchlight

Marguerite Sweeney, 60, has been the principal attorney at the law office of Marguerite Sweeney since 1990.

On-site worker rescue plan urged for confined spaces

By Sarah Yang

California lawmaker writes ‘Public Employees Bill of Rights’

Assemblyman Roger Dickinson, D-Sacramento,(right) has introduced legislation…

State News: 2.14

Walters: Jerry Brown has a big problem with tax measures — Dan Walters in the Sacramento Bee — 2/14/12

DWC Beefs Up Staff, Targets Bad Actors

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The California Division of Workers’ Compensation (DWC) and the Department of Industrial Relations (DIR) are improving cooperation while beefing up staff to better serve employers, injured workers and other members of the workers’ comp community, says Division of Workers’ Compensation administrative director Rosa Moran. She also notes that bad actors should be on notice — the various branches under the DIR umbrella are now actively sharing data and will be targeting the worst offenders for enforcement actions.

Moran delivered the opening keynote speech at DWC’s annual two-day educational conference in Los Angeles. The sold out event includes more than 900 attendees.

“We have people sharing data in the state - sharing data between EDD, DWC DOSH, Cal/OSHA - that data is really important because if there is one thing we’ve learned it’s that if you’re a bad employer, and there are lots of good employers out there, but if you’re a bad employer you tend to be bad all around,” says Moran. “You’re not just cheating on your workers’ comp, you’re probably cheating on your payroll, you’re probably not asking for documentation from your workers. By sharing that data it’s amazing how we can target a small group of people instead of bothering the employers who are actually trying to follow the rules.”

DIR recently took over direction of a collaborative effort to target the underground economy. “It’s about targeted enforcement. It’s not about going around randomly to different companies,” adds Moran. “We can use the data that we have and we have good data now and we can use that to look for the bad actors and go after them and support the good employers.”

In addition to trying to tear down the silos that have built up with DIR, Moran says the division is also gaining resources to help it do its job. She notes that Susan Hamilton, a retired deputy commissioner at the Workers’ Compensation Appeals Board (WCAB), has joined DWC as a special assistant to the administrative director. “She knows comp inside and out and is the person we go to when we don’t know what to do,” Moran says.

“We also have a bunch of new judges coming on board and I am thrilled to death by it. Most of the boards added one if not two judges and a couple added three judges,” she says. The limited hiring authority that allowed DWC to bring in the judges also provided for a senior legal secretary to support each of the judges and allow them to keep up with the paperwork.

Being in Southern California, Moran acknowledges that Los Angeles was ground zero for the lien problem. She notes that during visits to area boards that the average board she visited had “200 to 300 banker boxes full of unfiled liens…It’s a Southern California problem but it’s creeping up towards Fresno.”

Moran says she will be looking for suggestions from the community when she and DIR Director Christine Baker tour the state in April. Six forums are currently scheduled and additional ones may soon be added. The current list includes West Sacramento on April 10, Los Angeles April 16, Fresno April 18, San Bernardino April 24, La Mesa April 25 and Oakland April 30. Seating is limited, so individuals should sign up now by clicking here. DIR says it will likely provide a sign up sheet for those who wish to speak, and each speaker will be limited to three minutes. Written comments will also be accepted, or they can be emailed to DIR@dir.ca.gov. Stay tuned for additional meetings.

http://www.propertycasualty360.com/2012/01/13/opioid-use-a-growing-epidemic-in-workers-comp

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